When it comes to energy storage, some of the most skeptical entities in the power sector are often utilities.
Most recognize the promise of storage to provide grid services and even help defer some investments as an alternative to traditional grid upgrades. But start talking about batteries as an alternative to generation — such as replacing gas peakers — and many utilities get sheepish.
That’s the case even with utility leaders in energy storage. When Tucson Electric Power signed a breakthrough 4.5¢/kWh contract for a solar-plus-storage facility, executives steered away from comparing its capabilities to gas peakers.
Storage still has some “significant limitations” to peak shaving, “which can easily be longer than four hours,” the duration of the TEP battery, said Carmine Tilghman, the utility’s senior director for energy supply. Gas peakers and storage are different products and “should not be compared with each other and as replacement for one another.”
AES seems to be cut from a different cloth. On Tuesday, the utility holding company announced its energy storage subsidiary would enter into a joint venture with Siemens to form Fluence, a commercial- and utility-scale storage provider with more than 460 MW of storage deployed or awarded today.
During a speech in Washington, D.C., announcing the partnership, AES CEO Andres Gluski situated storage as a potential replacement for all kinds of bulk power infrastructure, from transmission to generation. In a subsequent interview with Utility Dive, he said AES’s 10 years of experience in the storage space give him the confidence that other power providers may lack.
“If you look at Southern California Edison, the 100 MW, 4-hour system competed against peaker plants,” he said. “We’ve shown it to be cost effective today. It’ll only become more cost effective as time goes on.”
Gluski was touting AES’s 100 MW, 400 MWh Alamitos project, awarded in 2014 in a local capacity RFO from the utility. That project is set to go into service in 2021, and since then the company has won other major projects, including deploying the largest lithium-ion battery in service and contracting for a 100 MWh battery to pair with a solar project in Kauai.
“Now it’s kind of like the asset test, if you think about what Kauai is doing. The prices will vary, depending on location and what the competing energy is,” he said. “But in 10 years of experience, I think we’ve proved that and our systems are still up and operating … and still making money for us.”
Fluence, the new joint venture with Siemens, will have access to 160 countries. Siemens’ SieStorage product focuses on commercial and industrial applications, while AES is a utility-scale specialist, so the venture will allow the company to run “the whole gamut” of large storage offerings, Gluski said.
Recent Comments